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By 2016, Hopewell will invest HK$9.2 billion to develop properties in Wan Chai, said Thomas Jefferson Wu, the managing director of Hopewell and its subsidiary, Hopewell Highway Infrastructure (HHI).
About HK$4.2 billion will go towards its Lee Tung Street project and HK$5 billion to Hopewell Centre II.
The Lee Tung Street project is Hopewell's 50-50 joint venture with Sino Land and residential and commercial properties are planned for the site, with a gross floor area of 835,000 square feet, scheduled to be completed in 2015. The initial plan for Hopewell Centre II is a conference hotel with 1,024 rooms, with a targeted completion date of 2016.
In Guangdong, Hopewell plans to invest at least one billion yuan (HK$1.14 billion) in the Liede commercial property project in Guangzhou, scheduled to be completed in the second half of 2015.
HHI, 70.27 per cent owned by Hopewell, will invest 1.38 billion yuan by 2012 in phases two and three of the Western Delta Route toll expressway in the Pearl River Delta. Phase 2 will connect the cities of Shunde and Zhongshan, while Phase 3 will connect Zhongshan with Zhuhai.
"Even after that (investing in the expressway), HHI will still have cash," said Wu, the son of Sir Gordon Wu Ying-sheung, the chairman of Hopewell and HHI. "Perhaps there are other transport opportunities in China we might consider investing in. Both companies have cash on hand and very strong balance sheets for future investment."
At the end of last year, Hopewell and HHI had a cash balance of HK$3.5 billion and HK$2.7 billion, respectively, as well as available bank credit facilities of HK$16.5 billion and HK$3.6 billion.
The global financial crisis affected Hong Kong's property rental market and manufacturing in Guangdong, which in turn reduced traffic on HHI's highways in Guangdong, Wu said. Although rental income in Hong Kong softened last year, it will probably strengthen this year, and truck traffic on Guangdong's highways recovered strongly in the second half of last year.
Hopewell's net profit jumped 171 per cent to HK$931 million for the six months to December, while earnings before income and tax (ebit) soared 97 per cent to HK$1.26 billion. The near-doubling of ebit was partly due to the fair-value gain of Hopewell's investment property under construction, Broadwood Twelve. – South China Morning Post
